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Earnings Preview: Corning Inc.

By: The Associated Press//April 25, 2011

Earnings Preview: Corning Inc.

By: The Associated Press//April 25, 2011

Corning Inc., the world’s biggest maker of liquid-crystal-display screens for flat-panel televisions and computers, releases its first-quarter financial results before the stock market opens Wednesday.

WHAT TO WATCH FOR: Whether and how fast LCD glass volume is slowing, plus fresh signs of how swiftly the company’s ultra-tough Gorilla cover glass is migrating from handheld and tablet devices to high-end TVs.

Analysts worry that retail demand for LCD TVs featuring Corning’s LCD glass may not be as strong this year as expected.

While Corning sees glass volume rising about 5 percent in the January-to-March quarter, analysts predict volume could flatten or fall as much as 5 percent in April through June as LCD-TV sales fall.

The specialty glass and ceramics pioneer commands more than 60 percent of the global market in LCD glass, which also is its biggest business by far.

Corning expects the appetite for flat-screen TVs, touch-screen tablets and smart phones to increase industry glass volume from 3.1 billion square feet in 2010 to between 3.6 billion and 3.8 billion square feet this year. The company expects demand to reach 5 billion square feet by 2014.

Corning says sales of Gorilla glass could surge to $1 billion this year from $250 million in 2010. Sony Corp. is incorporating Gorilla glass in a new line of Bravia TVs this year. Invented in 1962, Gorilla found commercial use only in 2008. LG Display Co. and Asahi Glass Co. make competing products.

Corning’s net income jumped 77 percent to $3.56 billion in 2010 from $2 billion in 2009. Revenue climbed 23 percent to $6.6 billion.

WHY IT MATTERS: With LCD-TV market penetration reaching 65 percent in the U.S., China will become the global leader in total TV sales. Corning is planning to build an $800 million advanced LCD glass plant in Beijing, with operations to start early next year. The company expects its China sales will grow to around $1.2 billion this year from more than $800 million in 2010.

Based in western New York state, Corning also makes air-pollution filters for vehicles and industrial plants and is the world’s largest producer of optical fiber and cable. It employs 24,500 people.

WHAT’S EXPECTED: Analysts on average expect Corning to report adjusted earnings of 44 cents per share and revenue of $1.8 billion, according to FactSet.

LAST YEAR’S QUARTER: Corning’s net income was $816 million, or 52 cents per share, on revenue of $1.55 billion.

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